FHA to sell off pools of distressed mortgages in Phoenix
The Federal Housing Administration is expanding a program that it hopes will entice investors and help people avoid foreclosure.
It’s called the Distressed Asset Stabilization Program. Pools of FHA-insured mortgages where the borrower is at least six months behind will be sold to investors at a competitive rate. Once they own the note, investors aren’t allowed to foreclose for six months -- which, the program hopes, will create time for a solution that allows the borrower to stay in their home.
The FHA plans to sell 9,000 loans in September, nearly half of them in four cities hit hard by the real estate crash:
Carol Galante is Acting Commissioner of the FHA. “We looked at communities where we had a fairly high backlog of potential foreclosures in the near term," Galante said. "We picked some markets like
Investors must meet a series of criteria to buy a pool of mortgages. The FHA plans to keep selling these pools quarterly.